MANVILLE BOILER CO. v. COLUMBIA BOILER CO. OF POTT

MANVILLE BOILER CO., Inc.
v.
COLUMBIA BOILER COMPANY OF POTTSTOWN, Inc.; Harriet I. Boarman and Provident Tradesmens Bank and Trust Company, as Executors of the Last Will of Frank I. Boarman, Deceased; and Harry J. Loughney

The opinion of the court was delivered by: DUSEN

This action is one based on alleged patent infringement and a claim of unfair competition. Plaintiff filed a Motion For Summary Judgment or, in the Alternative, For a Separate Trial on the issue of res judicata (see Document No. 42), its position being that the issues of validity and infringement here involved have been finally determined in its favor as between the parties by the decision in Manville Boiler Co. v. Columbia Boiler Co. of Pottstown, 269 F.2d 600 (4th Cir. 1959), cert. den. 361 U.S. 901, 80 S. Ct. 208, 4 L. Ed. 2d 156 (1959).

After hearing on the Motion For Summary Judgment, a Memorandum was filed 204 F.Supp. 385 (Document No. 59), which set forth the facts surrounding the Fourth Circuit case and analyzed the facts of record in light of the applicable legal principles. Although the Memorandum stated 'It appears to the court that this case may well be one in which 'Public Policy dictates that there be an end of litigation; that those who have contested an issue shall be bound by the result of the contest; and that matters once tried shall be considered forever settled as between the parties" (citing Caterpillar Tractor Co. v. International Harvester Co., 120 F.2d 82, 84 (3rd Cir. 1941)), it was determined that the record consisted of affidavits which did not cover all the factual material bearing on the issue of control of the litigation in the Virginia Federal Court. A Pre-Trial Order (Document No. 58) was entered which scheduled a trial limited to the issue of the control of that litigation, including appeals.
*fn1"

During the trial of the case, the only instructions received by Mr. Wobensmith concerned the Petition For Writ of Prohibition or Mandamus, which was brought in the Court of Appeals for the Fourth Circuit after a motion (filed by Columbia-Pottstown) to strike the writ of service and to dismiss on the ground of lack of venue was denied in the District Court. Columbia-Pottstown contends that its primary position in the Virginia Federal Court litigation was that venue was improper as to it (see footnote 4 below, setting forth history of its Motion to Dismiss for Improper Venue filed June 8, 1954).

When asked during the trial on the issue of control 'Who was in charge of the defense?', Mr. Wobensmith replied, 'I was' (N.T. 36). He attempted to explain his statements on the issue of control which were made at the time of the Virginia action (see P-4) by saying:

'I don't think that the import of the questions was even very clear to me at that time, and certainly as far as any actual control was concerned, I cannot now nor could I then have said that either company was in control of the litigation to the exclusion of the other, or in any respects that would say that I should favor one over another.' (N.T. 38-39).

Letters marked D-7 and D-9 refer to an offer which was made by Manville's attorney in January 1955, prior to argument on the Motion To Dismiss filed by the Pennsylvania corporation, that the parties agree that the Pennsylvania corporation was conducting, paying for, and controlling the litigation so that all matters could be disposed of in the Virginia action. This agreement was refused by Mr. Wobensmith (N.T. 39-42).

Services in connection with the deposition of witnesses for the defendants were all billed to the Pennsylvania corporation, including those for the deposition of Robert Boarman, the principal witness for defendants, and for the deposition of Robert Flora, the president of the Virginia corporation.
*fn5"

Even with all the evidence on the record concerning the participation of the Pennsylvania corporation in the Virginia action, it is not believed that plaintiff has met its burden of proving that the action against the Virginia corporation was controlled by the Pennsylvania corporation to such an extent that the doctrine of res judicata should apply in the peculiar circumstances of this case. It has been stated that 'While the mere payment of counsel fees or participation in a trial by one not a named party to it would not alone be sufficient * * * the extent and nature of that participation may completely alter the consequences.' Bros., Incorporated v. W. E. Grace Manufacturing Co., 261 F.2d 428, 430 (5th Cir. 1958). An important consideration is that the manufacturing corporation was an enforced party to this suit until August 14, 1958, when the final judgment on venue was rendered by the Virginia District Court, and that it was necessary for it to defend this ruling in the Court of Appeals for the Fourth Circuit. Also, Mr. Wobensmith has categorically denied any agreement regarding control, billing or favoring of one corporation as against the other.
*fn6"
Plaintiff has not shown that Columbia-Pottstown directed the action concerning Columbia-Virginia; in fact, the only direction which appears to have been given on behalf of Columbia-Pottstown during the entire litigation was one decision which concerned only the case against Columbia-Pottstown.
*fn7"

Under the peculiar circumstances with which the court is confronted in this case,
*fn8"
it must be found that Mr. Wobensmith's decision to render virtually all bills to Columbia-Pottstown prior to October 1959 and the other proven facts are insufficient to hold that Columbia-Pottstown so controlled the litigation that the doctrine of res judicata or collateral estoppel should apply. The plaintiff has not sustained its burden of proof on this issue of control, which is a very close question on this record.

ORDER

AND NOW, April 12, 1962, IT IS ADJUDGED that the defendants in the above action did not separately, or in cooperation with others, control the litigation against Columbia Boiler Co., Inc., in the United States District Court for the Eastern District of Virginia, docketed under C.A.1964, in the United States Court of Appeals for the Fourth Circuit docketed under No. 7768 (see Manville Boiler Co. v. Columbia Boiler Co. of Pottstown, 269 F.2d 600 (4th Cir. 1959)), and in the Supreme Court of the United States docketed under No. 428, October Term 1959 (see Columbia Boiler Co., Inc. v. Manville Boiler Co., Inc., 361 U.S. 901, 80 S. Ct. 208, 4 L. Ed. 2d 156 (1959)), and IT IS ORDERED that judgment shall be entered for the defendants on the above issue of control.

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